Freight Day! 👋 We’re starting the week with a shocking story out of Los Angeles. Executives at Sport LA Inc. are accused of smuggling billions of dollars in goods over the past decade, using bribes, shell companies, and cartel connections.

The contraband included counterfeit batteries, medical devices, firearms, and drugs, funneled through these companies to evade customs. More ahead 👇

💬 More in Freight:

⚫️ Trucking Credit Conditions Remain Stagnant

⚫️ Sensitive Self-Driving Data Leaked To China

⚫️ Nearshoring FDI Continues In Mexico

⚫️ Trucking Company Owner Pleads Guilty To PPP Fraud

Trucking Credit Conditions Remain Stagnant 💳

Trucking credit conditions at BMO showed signs of strain in Q2 after a brief recovery in Q1. Gross loans and acceptances in the transportation sector fell to $14.06 billion from $14.9 billion, the lowest since early fiscal 2023.

More concerning, gross impaired loans jumped to $503 million from $410 million—the highest since BMO’s acquisition of GE Capital’s transportation lending operations in 2015. Net loans dropped to just under $14 billion.

Some metrics improved slightly: allowances for credit losses dipped to $57 million from $61 million, and provisions rose modestly to $45 million. Net write-offs fell to $41 million from $46 million. Despite some gains, the overall picture suggests continued caution and challenges in trucking credit markets.

Sensitive Self-Driving Data Leaked To China 🇨🇳

TuSimple, now rebranded as CreateAI, reportedly sent sensitive autonomous vehicle data to Beijing-based truck maker Foton, despite a national security agreement prohibiting such transfers, The Wall Street Journal reported. The data sharing began in February 2022, just a week after TuSimple agreed to separate its U.S. operations from Chinese affiliates, and continued until the company’s compliance deadline six months later.

A CFIUS probe later found the data transfer didn’t technically breach the agreement, but TuSimple was fined $6 million for other violations. The company has since exited U.S. operations and delisted from the stock market, aiming to restart in China.

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Freight Forwarders Allegedly Smuggled Billions 🥷

Executives at Los Angeles-based Sport LA Inc. allegedly smuggled billions of dollars in goods into Mexico from the U.S. over a decade, using bribes, shell companies, and connections with drug cartels, federal prosecutors say.

Ralph Olarte, 55, a U.S. citizen, and Humberto Lopez Belmonte, 53, a Mexican national, allegedly concealed the nature of contraband—including counterfeit batteries, medical devices, handguns, ammo, e-cigarettes, and marijuana—and funneled them through shell companies to evade customs.

Mexican officials were bribed to allow entry without paying duties, while the duo laundered proceeds through shell accounts. Kickbacks to cartels, including Jalisco New Generation, ensured smooth operations, prosecutors allege.

Charges include conspiracy, smuggling, and fraud. Lopez has pleaded not guilty; Olarte’s plea status is unclear. Both face up to 20 years per wire fraud and laundering count, plus lesser penalties for smuggling and false statements.

FREIGHT SNIPPETS ✂️

👷‍♂️ Steel Tariffs | President Trump announced on May 30 that he will double steel and aluminum tariffs to 50% on June 4, aiming to protect U.S. industry. Speaking in Pittsburgh, he also hinted at approving a deal for Nippon Steel to invest in U.S. Steel, shifting from his earlier opposition. Nippon Steel’s $14 billion investment would enhance U.S. Steel operations, though details remain unclear. Union leaders are cautious, fearing job losses and foreign control, while some workers view the investment as a much-needed lifeline. Read more.

🇲🇽 Nearshoring Investments Continue | Foreign direct investment (FDI) in Mexico hit a record $21.4 billion in Q1 2025, a 5.4% increase from the same period last year, driven largely by U.S. firms contributing nearly 39%. Canada and Spain followed as top investors. The surge in FDI highlights Mexico’s continued draw for manufacturers looking to diversify supply chains away from Asia, amid ongoing trade tensions and tariff uncertainties. The manufacturing sector accounted for over 40% of Mexico’s total FDI, reinforcing its role as a nearshoring hub. Read more.

🏛️ Trucking Owner Pleads Guilty | Gurjeet Bath, owner of two Fresno trucking firms, pleaded guilty to theft of government property over fraudulent PPP loans. He admitted inflating staff and wage figures to secure $366,000 and $475,000 for G.S. Bath Inc., and $198,000 for Complete Transportation Solutions. Bath agreed to forfeit $841,500 and two properties and pay a $100,000 fine. Sentencing is Oct. 6, with a low-end jail term recommended and possible immigration consequences. Read more.

🔥 Canadian Wildfires | Over 25,000 residents in three Canadian provinces were evacuated as wildfires worsened air quality across Canada and parts of the U.S. Most evacuees are from Manitoba, which declared a state of emergency and evacuated 17,000 people. Alberta and Saskatchewan also ordered evacuations, with about 1,300 and 8,000 displaced, respectively. Air quality alerts were issued, and firefighting crews from other provinces and U.S. states were sent to assist. Premier Scott Moe warned that ongoing hot, dry conditions could worsen the fires, with critical days ahead. U.S. firefighting crews are also helping, and smoke is expected to continue affecting northern U.S. states. Read more.

✂️ Cutting Outsourced Miles | XPO has reduced outsourced linehaul miles to just 8.8% of total miles—the lowest in company history, CEO Mario Harik said during the April 30 Q1 earnings call. By insourcing more linehaul, XPO has improved efficiency and cut costs. Third-party carrier expenses dropped 53% from the previous year, CFO Kyle Wismans reported, saving the LTL carrier $41 million in purchased transportation costs. Read more.

🐝 Bees Escape | A semi hauling 70,000 pounds of live honeybee hives overturned on May 30 near Lynden, Washington, releasing an estimated 14 million bees. The Whatcom County Sheriff’s Office and bee experts responded, closing the road and warning the public to avoid the area. The hives were re-set, and the road reopened early the next afternoon. Watch now.

Pallets of News 🚛

Overturned Tariff Pause ⏯️

On May 29, the U.S. Court of Appeals for the Federal Circuit allowed President Donald Trump to temporarily continue collecting tariffs while he appeals a federal trade court ruling.

The U.S. Court of International Trade (USCIT) ruled on May 28 that Trump overstepped his authority under the 1977 International Emergency Economic Powers Act (IEEPA) to impose tariffs on imports from nearly every country. The legal challenge is expected to reach the Supreme Court.

Despite the setback, Trump’s administration has other ways to pursue its trade goals. Financial markets reacted mildly, with stocks rising slightly.

Trump’s IEEPA tariffs face at least seven legal challenges. The USCIT combined two cases: one from five small businesses and another from 12 U.S. states.

Nike Becomes First To Use Solar Barge ☀️

CMA CGM is launching Vietnam’s first fully electric container barge. Powered by a new solar-powered charging station at Cai Mep port, the barge is part of a joint venture with Gemadept, expanding river shipping in the Mekong Delta.

The project supports CMA CGM’s carbon-neutral goal by 2050 and complements its $600 million container terminal in Haiphong, set to open in 2028. NIKE, a longtime CMA CGM partner, will be the first to use the electric barge to transport goods.

Operating in Vietnam since 1989, CMA CGM plans to launch the barge in early 2026, with hopes to replicate this model globally.

MEME OF THE DAY 😂